They must forecast what is expected to happen over the next 3 years i.e. the insurance year and the 2 year Indemnity Period. If in doubt leave it higher and then adjust it at the end of the year.

Refer to the principle of utmost good faith in Sections 12, 13 and 14 of the Insurance Contracts Act.

This would be a breach of contract and lead to damages such as interest under the Insurance Contracts Act from the time they reasonably withheld payment. If it was deliberate it could lead to a bad faith claim. In general Insurers will take reasonable care to grant Indemnity to the Insured in a timely manner and will ensure the Policy responds appropriately.

That is a simplistic view. You need to trend for the policy year, and then both years. Each of the 3 years could be different

Indemnity Period refers to the cover available from the date of the loss not the policy inception.

The loss could occur late in the policy period i.e. the last day and then run for say the next 12 months being the Indemnity Period.

Claims preparation fees are not subject to Indemnity Period and they can be incurred and claimed outsider the Indemnity Period. Usually Business Interruption claims are finalised after the Indemnity Period and once the financial data is available.

No, but that is where an effective claims preparer can advise the client on what to do and assist the Insured with strategies to mitigate the loss. MSM can assist with finding tradespeople, other resources as well as strategic advice.

Usually the Sum Insured multiplies by the change in the Indemnity Period although differing growth trend rates also have an impact. It is a question of negotiating a rate with the Underwriter.

No. You can arrange a cover for longer than 24 months. Most insurers will offer 36 months. Beyond that would need to be negotiated with the Insurer.

The amount of gross profit to be declared for Indemnity Periods less than 12 months should still always be declared for 12 months.

When the period is higher, the amount should be proportionately increased to reflect the Indemnity Period selected.

You would need specific agreement with the Insurer and coinsurance deleted to declare for only the 6 months. You must be able to demonstrate the Insurer’s agreement otherwise you may face a non-disclosure issue and may have an issue if the position is tested.

The minimum period should be 12 months. The length of the Indemnity Period depends on a number of factors such as occupation, locations, rebuild times, lead times on plant and machinery and of course the time to get back to normal trading.

It depends on whether there is a link between the Incident and the Policy. If it is because of the damage the Policy may respond but if it is because of a death or injury then there may be no nexus between the two.

Refer to the definition of proximate cause i.e. is there an intervening cause which is the driver of the claim.

The Period of Loss depends on whether or not the Insured is able to generate the same of level of business that we would have been able to achieve had it not been for the Incident. In most cases, this depends on the growth trend agreed with the Loss Adjuster and the actual revenue compared to the standard revenue.

When claim payments are made depends upon the Policy type and the nature of the claim if it is a weekly cover (as suggested by the 2 day excess), then it is often paid weekly. Otherwise progress payments are agreed with the Loss Adjuster and facilitated by claim submissions.